Everyone is talking about a K-shaped economy, in which lower- and middle-income households are increasingly being squeezed by a weakening job market and rebounding inflation.

The backdrop has taken a toll on consumer wallets, shifting spending from discretionary to essential purchases. It’s also led to consumers rethinking where they spend their hard-earned money, with an increasing number seeking out retailers with a history of low prices, including discount chains and dollar stores.

Dollar General is one of the leading beneficiaries of this shift in customer behavior, as evidenced by its robust third-quarter results, which showed an increase in revenue and same-store sales, supported by higher customer foot traffic across all income levels.

The better-than-hoped figures took many on Wall Street by surprise, causing Dollar General’s share price to spike 14% higher.

Dollar General sales are growing as cash-strapped consumers visit its stores.

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Dollar General gets back to basics

Dollar General has been knee-deep in transforming its business to reinvigorate sales, a plan that includes opening new stores and remodeling existing ones, reducing shelf clutter, and hiring more employees.

The company already operates 20,388 U.S. locations, according to ScrapeHero, and in the third quarter alone, it opened 196 new stores, 651 remodels under its Project Elevate program, and 524 stores under Project Renovate.

Dollar General at-a-glance:

• Founded: 1939 by James Luther Turner as J.L. Turner and Son Wholesale in Scottsville, Kentucky.
• The company officially changed its name to Dollar General in 1968.
• Store count (Q3 2025): 20,901
• Employees (Q3 2025): 195,000 Source: Dollar General SEC filings.

Those new locations, many of which are smaller 8,500-square-foot stores in rural communities, plus others opened in 2025, have helped drive sales. Dollar General’s revenue rose 4.6% year-over-year to $10.65 billion, as same-store sales, or sales at stores open at least one year, increased by 2.5%.

Dollar General reports that customer foot traffic increased in the quarter as it gained more market share from higher-priced retailers. Still, the average basket size remained flat, as customers shopped more frequently but spent less per visit.

“Traffic and basket composition is consistent with what we have historically observed when our core customer feels more pressured on their spending as they come in more often, but have smaller basket sizes,” said CEO Vasos on Dollar General’s earnings conference call.

During the quarter, it experienced significantly greater same-store sales growth for its value-priced items, including its Value Valley offering, featuring 500 rotating items at the $1 price point. Value Valley’s same-store sales growth was 7.6%. 

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The combination of revenue growth and efforts to stop theft, including increased workers, helped Dollar General’s profit increase by 44% to $1.28 per share.

“Our ongoing efforts to reduce shrink once again contributed to strong operating margin expansion in Q3 as we delivered a 90 basis point improvement in shrink versus prior year. Notably, shrink continues to improve at a much higher and faster rate compared to the expectations contemplated in our long-term financial framework, and we expect continued improvement over time,” said CFO Donny Lau.

What’s next for Dollar General

Dollar General plans to continue remodeling stores under Project Elevate, which involves light remodels on older stores not yet due for a full remodel, and Project Renovate, its more comprehensive remodeling program.

In 2026, it plans to remodel 2,000 stores under Project Renovate and 2,250 locations under Project Elevate.

Dollar General also plans to continue opening more stores. It’s targeting 450 new stores in 2026, but longer-term, it believes that there’s room to open up to 11,000 more locations.

“We’re excited about our ability to significantly grow our footprint in the years to come. We anticipate that the majority of our new stores next year will be in one of our 8,500 square foot formats and will be predominantly in rural communities,” said Vasos.

Dollar General also plans to add fresh produce to 200 more stores next year as part of its push to capture more grocery sales, and it hopes to continue the early momentum associated with its partnerships with Uber Eats and DoorDash, allowing customers to order and get products delivered straight to their door. Deliver using Uber Eats and DoorDash is available in over 17,000 stores. So far, the average basket size for online orders is greater than for in-store transactions.

The company expects full fiscal year sales to increase by 4.7% to 4.9%, up from the previously projected range of 4.3% to 4.8%, and same-store sales to rise by 2.5% to 2.7%, up from the previously projected range of 2.1% to 2.6%. It also expects diluted earnings per share, or EPS, of $6.30 to $6.50, up from $5.80 to $6.30.

“This was a strong print, underpinned by solid momentum in traffic supporting the top-line,” wrote BNP Paribas Research analyst Chris Bottiglieri.

Dollar General shares gained 14.01% on Dec. 4.

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